Reports have surfaced that the world’s top lender may combine the 9th and 10th reviews with the bailout plan for Pakistan, which is set to expire on June 30. This comes as Prime Minister Shehbaz Sharif stated his confidence in completing the agreement with the International Monetary Fund (IMF).
owing to the impasse that has been between the two parties since November of last year because of the lender’s stringent requirements, it appears that the IMF is now considering this alternative owing to the time restrictions.
The most recent story follows prior claims that the Shehbaz-led administration had made the decision to proceed with the yearly budget planning process without seeking any direction from the IMF.
Over $2 billion is expected to be given to Pakistan in installments. Even though the 9th review of the Extended Fund Facility (EFF) has been completed, the staff-level agreement has not yet been implemented. For the remaining over $1 billion, there would need to be two additional evaluations because the international lender is unwilling to relax the stringent requirements.
Under the pretext of achieving economic sustainability, the IMF has been requesting information from the government regarding its strategy but is not prepared to relax the criteria pertaining to the budget allocations for 2023–2024.
The parties participating in the most recent round of negotiations to guarantee a breakthrough haven’t yet verified this report regarding clubbing the two reviews together.
Bloomberg was nevertheless informed by the Ministry of Finance that the government had secured $4 billion in outside funding and aimed to reach an agreement with the Washington-based lender before announcing the budget on Friday. The ministry further stated in an email response to Bloomberg that Pakistan was dedicated to finishing the IMF plan.
Also read: The United States desires for Pakistan to be a stable and wealthy nation. Ministry of State
Similar to this, IMF Resident Representative Esther Perez Ruiz stated that the programme would resume after the government met the objectives of the lender’s programme, provided appropriate finance while presenting the budget, and ensured that the Pakistani rupee was “properly functioning” on the market. As the present programme nears its end, “IMF staff continues the engagement with the Pakistani authorities to pave the way for a Board meeting,” Ruiz added.
The IMF’s insistence on raising tax collection and utility and fuel prices while maintaining a budget deficit and the government’s desire to increase targeted subsidies and development spending are the key causes of conflict. Additionally, the IMF is doing absolutely nothing on the issue of foreign finance provided by friendly nations like China and Saudi Arabia.
